Employees across Australia are increasingly turning to artificial intelligence tools to prepare workplace complaints, grievances and legal claims, according to new research by Citation Group.
The report, based on a survey of 510 Australian business owners and managers, found AI adoption is accelerating faster than workplace safeguards.
AI tools are now being used by 48% of small businesses, 65% of medium-sized businesses and 73% of large businesses. Yet only 29% of businesses already using AI strongly agreed the technology was being used safely and beneficially within their organisation.
The findings point to a widening gap between AI adoption and governance, particularly as employees begin using the same tools to challenge workplace decisions, check entitlements and draft formal complaints.
Rising claims
The study highlights a major shift in workplace disputes.
Employers are using AI for scheduling, payroll analysis and policy drafting. Employees, meanwhile, are using it to identify underpayments, assess workplace rights and prepare legal-style grievances.
According to the report, the Fair Work Commission has linked a 70% rise in workload over the past three years partly to employees using AI tools to lodge claims faster.
Many of those complaints contain legal inaccuracies, fabricated case references or facts that do not align with real circumstances. Despite that, businesses are still required to formally respond.
New challenge
Brittany Byrne, Partner and Solicitor, Citation Legal, said AI was changing how workplace disputes emerge and escalate.
"AI is giving employees faster access to information about their rights and entitlements. That doesn't mean every AI-assisted complaint is valid, but it does mean every complaint needs to be handled properly," Byrne said.
She warned that businesses relying on informal processes were especially vulnerable.
"The businesses most exposed are not necessarily those doing the wrong thing deliberately. They're the businesses relying on informal processes, verbal conversations and undocumented decisions in an environment where employees are increasingly informed and empowered to act," Byrne said.
The report said polished, legally structured complaints can be difficult for managers to assess, particularly in smaller organisations without dedicated HR or legal teams.
Weak processes
Despite 97% of business owners and leaders saying they felt confident managing workplace responsibilities, almost half lacked a clear HR strategy.
The study found 44% of businesses had no defined approach to managing HR and people.
Among small businesses, 38% admitted HR was handled on an ad hoc basis. The figure fell to 14% for medium-sized businesses and 11% for large businesses.
Payroll pressure
Payroll compliance emerged as another major area of risk.
While 87% of businesses believed their payroll systems were accurate, 42% said they had uncovered a payroll error at some point. Nearly one in five identified an error within the past year.
The issue carries greater urgency because wage theft is now a criminal offence in Australia.
The report said AI tools are making it easier for employees to compare payslips, awards and entitlements, increasing scrutiny on payroll practices that may have gone unchallenged for years.
Michal Roucek, Partner and Solicitor at Citation Legal, said AI was accelerating how quickly employees identify compliance gaps.
"Employees using AI are quickly exposing weaknesses in contracts, policies and payroll compliance - from underpayment claims to unfair dismissal. It's now more important than ever for businesses to get the right advice from a human expert," Roucek said.
He added that concerns can now escalate rapidly into formal disputes.
"The new reality in employment relations is that AI makes it easier for employees and former employees to identify gaps, challenge management decisions and escalate concerns before a business even realises it was exposed," Roucek said.
Warning signs
Citation Group said common indicators of AI-assisted workplace complaints include unusually formal language, repetitive phrasing, US spelling and inaccurate references to legislation or case law.
The report also pointed to inconsistencies in timelines and missing details as signs that a complaint may have been generated with the help of AI tools rather than written from direct knowledge.
For employers, the findings suggest a more contested workplace environment where access to legal-style language and procedural knowledge is no longer limited to those who can afford professional advice.
Businesses still relying on undocumented conversations, inconsistent policies and manual payroll systems are expected to face the greatest pressure.